Suven Pharma to buy 67.5% stake in Sapala Organic for Rs 229.5 crore

14 Jun 2024 , 10:46 AM

Suven Pharmaceuticals, funded by PE company Advent International, announced on Thursday that it has signed a formal agreement to acquire a controlling stake in Hyderabad-based contract research development organisation (CDMO) Sapala Organic for ₹229.5 Crore in an all-cash transaction.

According to the provisions of the definitive agreements, Suven would initially acquire a 67.5% equity ownership in Sapala, subject to usual working capital and net debt adjustments, with the remaining portion acquired a few months after FY2026-27.

Sapala had sales of more than ₹67 crore and adjusted EBITDA margins of roughly 45% in FY24.

Sapala is a CDMO player that focuses on oligonucleotides. Oligonucleotides are short DNA or RNA molecules used in pharmaceuticals and diagnostics.

The oligonucleotide building blocks market is valued at $750 million and is predicted to develop at a 20% CAGR.

Sapala is one of the few players with a large customer base that includes innovative pharma, CDMOs, and diagnostic firms. It is also a significant partner in its Oligo drug NCE programmes.

“With this acquisition, we now have several distinct technological platforms, including antibody-drug conjugates (ADCs) and oligos, among others. Suven Pharma’s executive chairman, Annaswamy Vaidheesh, stated that the company will continue to spend both organically and inorganically to expand on these successes.

Sapala was founded by P Yella Reddy, who has over 20 years of experience in nucleic acid chemistry and previously worked as Director (R&D) with Aisin Cosmos R&D Co. Ltd (Toyota Group) in Japan and India. Reddy will continue to run the business as CEO and serve as a strategic advisor for the Japanese market on the Suven+Chance platform.

At around 10.00 AM, Suven Pharma was trading 3.29% higher at ₹689.95, against the previous close of ₹667.95 on NSE. The counter touched an intraday high and low of ₹705, and ₹686, respectively.

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